[ISC] Q. 37 Issue of Debentures solution TS Grewal Class 12 (2023-24)

Solution of Question number 37 of the Issue of Debentures Chapter of TS Grewal Book ISC Board 2023-24 session?

Aar Kay Ltd. issued on 1st April, 2021, 15,000; 10% Debentures of ₹ 100 each at a premium of 10% redeemable at a premium of 5%. The amount was payable along with application and the interest was payable half-yearly on 30th September and 31st March each yeaer. Tax is deducted @ 20%.

Applications were received for 20,000 Debentures. Allotement was made to all the applicants on pro rata basis.

You are required to:

(i) Pass Journal entries for issue of debentures.

(ii) Pass Journal entries for interest, and

(iii) Prepare 10% Debentures Account.

Solution:-